ALGERIA: Sonatrach Seizes Sunny Hill Energy Gas Asset Over US$1 Billion Claim.
Sonatrach, Algeria’s national energy company, has terminated the contractual interest held by the U.K. company Sunny Hill Energy through its wholly owned subsidiary Petroceltic Ain Tsila in the Ain Tsila gas field in southeast Algeria.
Sunny Hill Energy has invested hundreds of US$ millions in the project. Sonatrach has offered no compensation in relation to their seizure of the interest. Sunny Hill Energy disputes the validity of the contract termination and, having taken legal advice, intends to pursue all legal recourse to compensate it for the loss of its interest which Sunny Hill Energy values well in excess of US$1 billion.
Angelo Moskov, the Chairman of Sunny Hill Energy said, ‘Sonatrach has acted in an aggressive and irrational manner. Their attempted expropriation of our interest without compensation is the type of action expected in Hugo Chavez’s Venezuela and not from a country like Algeria that proclaims to respect the rule of law. This unwarranted action will be highly damaging to the attempts by Algeria to attract foreign investment into the country.’
Mr Moskov continued, ‘We have strong legal advice that this action by Sonatrach is without legal merit. We have fully met our contractual obligations including providing our full share of resources required for the operation of the joint venture with Sonatrach. We will robustly pursue our claims taking all actions to protect our interests. This will include making a claim for compensation from Sonatrach and/or the State of Algeria well in excess of US$1 billion.’